Department officials to be questioned Committee to examine failure of MediaLab

The collapse of the State-sponsored digital research institute MediaLab Europe will be investigated by the Public Accounts Committee (PAC) in late April.

The committee is expected to examine the terms of the contract agreed between the Government and the Massachusetts Institute of Technology (MIT). It will also investigate the reasons for the closure of the MediaLab, which cost the Exchequer €35.5 million.

PAC chairman Deputy Michael Noonan said yesterday that the committee would question officials at the Department of Communications about the decision to close the institute at a scheduled meeting in April.

He said the MediaLab Europe project seemed like a good idea at the time and could even be described as visionary. However, clearly its financial foundations were weak, added Mr Noonan, who described the institute as a pet project for the Taoiseach.

"The MediaLab was a pet project of the Taoiseach and often in Ireland we find that the pet projects of politicians don't get the same kind of financial scrutiny that other projects get."

A Comptroller and Auditor General briefing note on the failure of the project is being circulated to PAC members in preparation for the meeting.

The briefing note is understood to detail a potted history of the high-profile project, which was originally pioneered by the Department of the Taoiseach at the height of the internet boom.

It also details ongoing discussions between the State's legal advisers and MIT over who retains the rights to the patents and intellectual property created by the project.

A decision to close MediaLab Europe was announced last month by the Minister for Communications, Mr Dempsey.

The project collapsed when its two shareholders, the Government and MIT, failed to agree a rescue package.

The directors of MediaLab Europe had signalled that it would need about €9 million public funding to survive.

The original business plan for the project envisaged the research body drawing its funding from corporate sponsors. However, when these failed to emerge and management failures at MediaLab Europe were highlighted in a consultancy report for the Government, the State agreed to wind down the project.

The State spent € 35.5 million on the MediaLab Europe project and about 50 people will lose their jobs when it closes. The State retains a €22.5 million property in which MediaLab Europe was housed in the "Digital Hub" in the Liberties area of Dublin.